HOLMAN and W&D MOFFATT PTY LTD
[2016] WASAT 105 (S)
•19 DECEMBER 2017
HOLMAN and W&D MOFFATT PTY LTD [2016] WASAT 105 (S)
| STATE ADMINISTRATIVE TRIBUNAL | Citation No: | [2016] WASAT 105 (S) | |
| BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA) | |||
| Case No: | CC:1736/2014 | DETERMINED ON THE DOCUMENTS | |
| Coram: | MR C RAYMOND (SENIOR SESSIONAL MEMBER) MR R AFFLECK (SENIOR SESSIONAL MEMBER) | 19/12/17 | |
| 15 | Judgment Part: | 1 of 1 | |
| Result: | Applicant ordered to pay costs fixed by Tribunal | ||
| B | |||
| PDF Version |
| Parties: | IAN EDWARD HOLMAN W&D MOFFATT PTY LTD |
Catchwords: | Building Services (Complaint Resolution and Administration) Act 2011 (WA) Review of decision of Building Commissioner to issue building order for remedial work Applicant unsuccessful Applicant ordered to pay costs as agreed or failing agreement as fixed by Tribunal Principles to be applied in fixing costs |
Legislation: | Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 57(1)(c) Legal Practitioners (State Administrative Tribunal) Determination 2012 (WA) Legal Practitioners (State Administrative Tribunal) Determination 2014 (WA) Legal Practitioners (State Administrative Tribunal) Determination 2016 (WA) Legal Profession Act 2008 (WA) |
Case References: | J & P Metals Pty Ltd and Shire of Dardanup [2006] WASAT 282 (S) Marvelle Investments Pty Ltd and Argyle Holdings Pty Ltd [2010] WASAT 125 |
Orders | We shall accordingly cause an order to issue in the following terms:,1. The costs payable by the applicant to the respondent are fixed in the sum of $46,177.02.,2. The applicant must on or before 19 January 2018 pay the respondent's costs in the sum of $46,177.02 to the respondent. |
Summary | The applicant was unsuccessful in an application under s 57(1)(c) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) for the review of a decision by the Building Commissioner to issue a building remedy order requiring the applicant to remedy the cause and effect of extensive cracking throughout the respondent's house and was ordered to pay the respondent's costs either as agreed or failing agreement as fixed by the Tribunal. ,The parties having failed to agree costs the Tribunal proceeded to fix the costs. The respondent claimed legal fees of $30,719.91 and disbursements in respect of expert witness fees of $30,130.81 totalling $60,850.72. After setting out and applying the applicable principles and considering the submissions of the parties the Tribunal allowed legal fees in an amount of $22,072.37 and disbursements in an amount of $24,104.75.,The Tribunal accordingly made an order fixing the total costs payable by the applicant to the respondent in the sum of $46,177.02 to be paid within 28 days. |
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL ACT : BUILDING SERVICES (COMPLAINT RESOLUTION and ADMINISTRATION) ACT 2011 (WA) CITATION : HOLMAN and W&D MOFFATT PTY LTD [2016] WASAT 105 (S) MEMBER : MR C RAYMOND (SENIOR SESSIONAL MEMBER)
- MR R AFFLECK (SENIOR SESSIONAL MEMBER)
- Applicant
AND
W&D MOFFATT PTY LTD
Respondent
Catchwords:
Building Services (Complaint Resolution and Administration) Act 2011 (WA) - Review of decision of Building Commissioner to issue building order for remedial work - Applicant unsuccessful - Applicant ordered to pay costs as agreed or failing agreement as fixed by Tribunal - Principles to be applied in fixing costs
Legislation:
Building Services (Complaint Resolution and Administration) Act 2011 (WA), s 57(1)(c)
Legal Practitioners (State Administrative Tribunal) Determination 2012 (WA)
Legal Practitioners (State Administrative Tribunal) Determination 2014 (WA)
Legal Practitioners (State Administrative Tribunal) Determination 2016 (WA)
Legal Profession Act 2008 (WA)
Result:
Applicant ordered to pay costs fixed by Tribunal
Summary of Tribunal's decision:
The applicant was unsuccessful in an application under s 57(1)(c) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) for the review of a decision by the Building Commissioner to issue a building remedy order requiring the applicant to remedy the cause and effect of extensive cracking throughout the respondent's house and was ordered to pay the respondent's costs either as agreed or failing agreement as fixed by the Tribunal.
The parties having failed to agree costs the Tribunal proceeded to fix the costs. The respondent claimed legal fees of $30,719.91 and disbursements in respect of expert witness fees of $30,130.81 totalling $60,850.72. After setting out and applying the applicable principles and considering the submissions of the parties the Tribunal allowed legal fees in an amount of $22,072.37 and disbursements in an amount of $24,104.75.
The Tribunal accordingly made an order fixing the total costs payable by the applicant to the respondent in the sum of $46,177.02 to be paid within 28 days.
Category: B
Representation:
Counsel:
Applicant : Mr MS Macdonald
Respondent : Mr A Prime
Solicitors:
Applicant : Macdonald & Rudder
Respondent : MDS Legal
Case(s) referred to in decision(s):
J & P Metals Pty Ltd and Shire of Dardanup [2006] WASAT 282 (S)
Marvelle Investments Pty Ltd and Argyle Holdings Pty Ltd [2010] WASAT 125
The Proceedings
1 The applicant applied under s 57(1)(c) of the Building Services (Complaint Resolution and Administration) Act 2011 (WA) (BSCRA Act) for the review of a decision made by the Building Commissioner to issue a building remedy order as reflected in Building Remedy Order No 228 of 2014 in respect of a regulated building service carried out by the applicant in constructing a residential house at 5 Maher Street, Somerville, Kalgoorlie.
2 On 5 September 2016 the Tribunal found against the applicant Mr Ian Edward Holman, (hereinafter referred to as the applicant), so that the review was unsuccessful, but delayed making final orders because it was apparent that the order under review should be varied to reflect a change in the remedial work required and because of practical considerations relating to the timing of the repairs. This required further expert investigation. Final orders were eventually made on 17 October 2017. The respondent W&D Moffatt Pty Ltd), (hereinafter referred to as the respondent) applied successfully for an order that the applicant pay the costs of the proceedings, either as agreed, or failing agreement, as fixed by the Tribunal. Directions were issued to enable the respondent to provide a schedule of the costs claimed with sufficient detail to enable the Tribunal to fix the costs, and to enable the applicant to file submissions in opposition to any costs claimed.
3 The parties have failed to agree the amount of the respondent's costs and it therefore falls on the Tribunal to fix the costs payable.
The principles to be applied
4 The principles set out in J & P Metals Pty Ltd and Shire of Dardanup [2006] WASAT 282 (S) (J & P Metals) have been consistently applied in fixing costs.
5 At [9] the Tribunal stated:
'There is no prescribed scale in relation to work done in relation to proceedings before this Tribunal. Assessing costs for the purposes of s 87 of the State Administrative Tribunal Act 2004 (WA) (SAT Act) will usually require a determination as to what costs are reasonable given the nature of the matter, its complexity, its importance, possibly its urgency, and the amount of time and effort required to properly prepare and present the case. Consideration of issues of that nature may be assisted by analogy with other legal work for which a statutory scale is applicable. Scales are, however, no more than an indication of what might be thought reasonable for certain categories of work. If a scale is to be used for that purpose, it will not always be the scale applicable to Supreme Court proceedings. There will be cases where the subject matter will make the determination in relation to Magistrates Court civil proceedings more appropriate by way of analogy. The Tribunal will always strive to maintain proportionality between the subject matter of the proceedings and the costs associated with the proceedings'.
6 Subsequent to the enactment of the Legal Profession Act 2008 (WA) determinations have been published which set the maximum rates which legal practitioners are permitted to charge as between solicitor and client in respect of proceedings before the Tribunal in the absence of a costs agreement. Since the publication of such determinations they have been used as a guide to the maximum rates which the Tribunal might allow in fixing costs as between party and party: see Marvelle Investments Pty Ltd and Argyle Holdings Pty Ltd [2010] WASAT 125.
7 The Tribunal stated further in J & P Metals at [38]:
'The procedures of the Tribunal are designed to achieve the objectives prescribed by s 9 of the SAT Act. The Tribunal strives to ensure that its procedures are proportionate to the nature of the matters in issue. On occasions, matters before the Tribunal are difficult and complex, sometimes involving lengthy hearings. This is not such a matter. In the unusual event that an order for costs is made by the Tribunal, the Tribunal's obligation to minimise the costs to parties will be reflected in the costs assessed by the Tribunal as recoverable. That approach reflects an expectation that representatives of parties before the Tribunal will approach a proceedings in a way that minimises costs to their clients. If clients choose to approach proceedings before the Tribunal in a way which substantially increases costs for them, it will be a rare case where that increase in costs will be recoverable through a favourable costs order'.
The application of the above and other principles
8 The respondent has provided a schedule of the costs in the form of a bill of costs, reflecting the services rendered, with footnotes to enable determination of the seniority of the legal practitioner doing so and the rates charged, together with attached vouchers showing amounts disbursed in respect of expert engineering attendances.
9 The legal services rendered cover a period from 13 November 2014 to 17 October 2017 and thereafter for the provision of the costs schedule. At all times, the services have been charged at the maximum rate reflected in the applicable determinations. These are:
• The Legal Practitioners (State Administrative Tribunal) Determination2012 operative from 1 January 2013 which sets maximum hourly rates for senior practitioners of $374 and for junior practitioners of $275 inclusive of GST;
• The Legal Practitioners (State Administrative Tribunal) Determination 2014 operative from 1 January 2015 which sets maximum hourly rates for senior practitioners of $396 and for junior practitioners of $297 inclusive of GST; and
• The Legal Practitioners (State Administrative Tribunal) Determination2016 operative from 1 July 2016 which sets maximum hourly rates for senior practitioners of $407 and for junior practitioners of $308 inclusive ofGST.
10 All rates referred to and amounts stated to be allowed hereafter are inclusive of GST.
11 The importance of the case is a factor which weighs in favour of a rate towards the higher end of the scale. Although not known until a late stage in the proceedings the most probable cause was that the building was moving towards an old irrigation dam which was filled prior to subdivision of the land and ultimately development of the site. Cracking had continued for a considerable period and the appropriate remedy was not known until sometime relatively shortly before the final hearing in October 2017. The respondent would have had a justifiable concern about whether the house could be adequately repaired, but the legal principles involved were not complex. The respondent had authority in its favour which although dealing with the legislation in force prior to the coming into effect of the BSCRA Act was clearly analogous. Any complexity in the case lay in the investigation of the cause of cracking in the residence, which was really driven by the expert engineering witnesses.
12 Almost all the legal services were provided by a single senior practitioner. We have concluded that the appropriate hourly rate which should be allowed for a senior practitioner is $330 for the period prior to 1 January 2015, thereafter, $350 to 30 June 2017 and $360 from 1 July 2017. This equates to 88% of the maximum rate for each period and that percentage will therefore also be applied to the few attendances by a junior practitioner.
13 In arriving at this conclusion we have rejected the submission made on behalf of the applicant that for attendances at directions and other hearings the only costs which should be allowed are those applicable for counsel. Counsel did not attend those hearings. All appearances were by the same senior practitioner.
14 Having examined the attendances of the respondent's legal representatives we are satisfied that there has not been any over generous allocation of resources to the conduct of the proceedings. The matter has been conducted with the efficiency which the Tribunal expects of legal representatives appearing in the Tribunal.
15 In relation to all hearings the applicant has challenged the time claimed by the respondent. We have checked the time of the hearing as recorded by the Tribunal. The Tribunal's records may not always be entirely accurate and are dependent on the case manager recording the commencement and conclusion of each part of the hearing. Inaccuracies may occur because of short adjournments when parties may want an opportunity for discussion with clients or the other side, or simply because of human error. The records show that the respondent has often overstated the hearing time compared to the Tribunal's records. Where the applicant has stated a time period which is longer than that recorded by the Tribunal we have accepted the applicant's statement. It appears that the respondent has consistently included travelling or waiting time because generally the applicant's record of the time is less than that of the respondent but in all but one instance very close to that of the Tribunal.
16 We have rounded the time charged for attendances at hearings to such fractions of an hour as permit convenient calculation.
Assessment of the costs schedule
17 The schedule comprises of 15 items of claim totalling $60,850.72, being made up of $30,719.91 in respect of legal fees, and $30,130.81 in respect of disbursements paid to the engineers retained by the respondent.
18 We shall address each item in turn.
1. Response/statement of issues $2,957.04
19 A total time of 320 minutes by a junior practitioner and 207 minutes by a senior practitioner (in proportion 40:60) is claimed for services between 17 February 2015 and 9 October 2015 for the preparation of a statement of issues, an amendment and a later substituted statement of issues. This equates to 8¾ hours.
20 We consider that time to be excessive in any event, but also because as submitted by the applicant, much of the substance of the document would have been placed before the Building Commissioner. We consider a total time allowance of 4½ hours (270 minutes) is sufficient.
21 We do not accept the applicant's submission that the respondent should not recover the costs of the amendments to the statement. The need to amend is not unusual in a case such as this.
22 The reduced time should be apportioned between the junior and senior practitioner in the proportion they each contributed of 40:60 (108 minutes: 162 minutes.
23 Rounded up slightly this equates to 1¾ hours for the junior practitioner and 2¾ hours for the senior practitioner. We have allowed their charges at 88% of the maximum hourly rates of $297 rounded to $260, and $396 rounded to $350, respectively. This calculates to a total allowed for item 1 of $1,417.50.
2. Preparation for and attendance at mediation on 3 November 2015 - $1,696.20
24 The respondent claims 257 minutes for a senior practitioner. The applicant asserts the preparation for the case claimed under item 11 includes a 38 minute meeting with the applicant (it does on 2 November 2015) and this should be excluded. As this meeting is far more likely to have been to prepare for the mediation we disagree but it cannot be claimed twice and should be deducted when considering item 11.
25 The Tribunal record reflects the mediation hearing duration was 120 minutes which we accept. The applicant stated the duration was 'around 110 minutes'. That means the preparation for mediation (including a 38 minute meeting with the respondent) took 137 minutes. Contrary to the applicant's submission we do not consider the time spent in preparation to be excessive. Good preparation is essential for the process to be effective and is to be encouraged.
26 We allow the full time claimed at the rate of $350 which calculates to the sum of $1,487.50.
3. Attendance at directions hearing on 9 December 2014 - $573.46
27 The claim is based on 92 minutes of time for the senior practitioner. The applicant states the hearing took approximately 60 minutes. The Tribunal records show the hearing was of only 13 minutes duration which seems unreliable as it is very unusual for a first directions hearing to be of such short duration. We accept the applicant's statement of the duration.
28 The maximum rate for a senior practitioner at that time was $374 per hour so that applying a rate of 88% rounded to $330, the amount allowed for this item is $330.
4. Attendance at directions hearing on 5 February 2015 - $402.60.
29 The claim is based on 61 minutes of time for the senior practitioner. The applicant states the hearing took approximately 15 minutes. The Tribunal records show the hearing was of only 12 minutes duration.
30 We will allow $87.50 for this item based on ¼ of an hour at a rate of $350 per hour.
5. Attendance at directions hearing on 23 June 2015 - $613.80.
31 The claim is based on 93 minutes of time for the senior practitioner. The applicant states the hearing took approximately 36 minutes. The Tribunal records show the hearing was of 34 minutes duration.
32 We will allow $ 210 for this item based on six tenths of an hour at a rate of $350 per hour.
6. Attendance at directions hearing on 8 July 2015 - $514.80
33 The claim is based on 78 minutes of time for the senior practitioner. The applicant states the hearing took approximately 60 minutes. The Tribunal records show the hearing was of 58 minutes duration.
34 We will allow $350 for this item based on one hour at a rate of $350 per hour.
7. Attendance at directions hearing on 10 August 2015 - $277.20
35 The claim is based on 42 minutes of time for the senior practitioner. The applicant states the hearing took approximately 25 minutes. The Tribunal records show the hearing was also of 25 minutes duration.
36 We will allow $175 for this item based on ½ an hour at a rate of $350 per hour.
8. Attendance at directions hearing on 10 November 2015 - $433.60
37 The claim is based on 66 minutes of time for the senior practitioner. The applicant states the hearing took approximately 42 minutes. The Tribunal records show the hearing was of 43 minutes duration.
38 We will allow $262.50 for this item based on ¾ of an hour at a rate of $350 per hour.
9. Attendance at directions hearing on 19 April 2017 - $420.36
39 The claim is based on 62 minutes of time for the senior practitioner. The applicant states the hearing took approximately 42 minutes. The Tribunal records show the hearing was of 39 minutes duration.
40 We will allow $240 for this item based on two thirds of an hour at a rate of $360 per hour.
10. Attendance at directions hearing on 4 July 2017 - $379.68
41 The claim is based on 56 minutes of time for the senior practitioner. The applicant states the hearing took approximately 35 minutes. The Tribunal records show the hearing was of 33 minutes duration.
42 We will allow $180 for this item based on six tenths of an hour at a rate of $360 per hour.
11. Preparation of case - $17,046.49
43 The attendances and time spent showing how the amount claimed has been calculated is set in a separate attachment to the schedule of costs marked 'B'.
44 The applicant submits that many of the attendances for which charges are claimed are of an administrative nature not 'necessarily' recoverable on a party and party basis. No particular attendances are identified. There are many attendances in the form of correspondence, emails or telephone calls to various experts, the applicant's legal representatives and a few meetings with the respondent. The latter attendances are minimal and one meeting on 2 November 2015 is disallowed as discussed above as being in respect of preparation for mediation. Subject to this we see no reason why these attendances should not be recoverable as costs in preparation of the case.
45 We also do not accept the applicant's submission that reviewing documents or authorities should form costs of the hearing not preparation. In any event that would simply shift the recoverable costs from one item to another. Nor do we accept that some preparation on review should be disallowed because it is a hearing de novo. There was no actual hearing before the Building Commissioner and the attendances relate directly to the proceedings before the Tribunal.
46 We do however note that, on our calculation some 218 minutes is charged between 4 March 2016 for and in respect of attendances leading up to the hearing on 9 March 2016 which obviously relates to preparation for that hearing. The hearing was adjourned on the application of the respondent due to the hospitalisation of the respondent's expert witness. That preparation appears to be duplicated prior to the hearing on 7 June 2016. We disallow that time and the 38 minutes claimed for the meeting on 2 November 2015 to which we have referred that is in effect 4¼ hours.
47 The attendances during this period have been charged at a rate of $396 per hour so that the amount claimed is reduced by $1,683 leaving a balance claimed of $15,363.49. This amount needs to be further reduced by applying a rate of $350 per hour resulting in the amount which we will allow of $13,519.87.
12. (a) Hearing 9 March 2016 - $745.80
48 These costs do not constitute costs reasonably and necessarily incurred in the conduct of the case. The hearing could not continue and was adjourned on the application of the respondent due to the nonavailability of the respondent's expert witness. The amount claimed is disallowed.
(b) Hearing 7 June 2016 - $2,448.60
49 The applicant objects to the respondent also including under item 11 time spent in preparation and claiming 345 minutes for attendance at the hearing. This objection is not accepted. They are charges for two different activities.
50 The applicant states the hearing time was approximately 345 minutes (5¾ hours). The Tribunal records reflect the hearing time was 260 minutes. For the reasons previously given we prefer to rely on the applicant's record of the time.
51 We allow in respect of this item 5¾ hours at a rate of $350 which equals $2,012.50.
(c) Hearing 17 October 2017 - $1,396.68
52 Once again the applicant objects to claims for preparation and attendance at hearing which objection is not accepted for the reasons already given.
53 The respondent states the hearing time was approximately 206 minutes. The Tribunal records reflect the hearing time was 135 minutes. The applicant states the hearing time was approximately 170 minutes and for the reasons previously given we accept that time.
54 The rate applicable and which we have indicated we allow after 1 July 2017 is $360 per hour and which we allow for three hours resulting in the sum of $1,080 allowed in respect of this item.
13. Drawing Bill of Costs $813.60
55 The time claimed by the respondent is 120 minutes. The applicant submits the time is excessive and has been charged in respect of a senior practitioner when a junior practitioner could have done so at a lower rate.
56 We consider the work has been carried out efficiently and appropriately given that the senior practitioner had virtually the entire conduct of the matter on his own.
57 In respect of this item we allow the full time claimed at the rate of $360 per hour resulting in a sum allowed of $720.
14. Taxation of costs TBA
58 No costs are claimed as a taxation has not been held. The Tribunal has proceeded to fix the costs on the documents.
15. Disbursements Airey Taylor Fees $30,130.81
59 Accounts have been filed totalling the sum claimed as has a ledger showing payments totalling $33,722.22. The claim has not been amended to increase the amount nor have any further accounts been filed.
60 The applicant submits that insufficient detail has been provided to identify the actual work for which the charges have been made. We disagree sufficient detail is provided for that purpose.
61 A more valid criticism is that the accounts do not show the rate charged nor the hours spent on the work undertaken. The respondent has endeavoured to meet this criticism by subsequently filing a schedule of rates excluding GST which apply in 15 minute units. This carries a risk of charging at a very high rate for attendances that might involve only a few minutes. The rates vary per hour from $350 for one of the directors to $130 for an administrative assistant.
62 The rates provided are presumably the current rates and would be unlikely to have applied from the outset of this matter. The first account relates to advice provided in December 2014 and the last relates in part to attendance before the Tribunal on 17 October 2017.
63 Mr Peter Airey, a director of the company concerned, who appears to have provided all advice throughout the matter is a very experienced engineer who has given evidence before the Tribunal on numerous occasions, probably more so than any other engineer. The rates charged by him must as a matter of basic economics be set by supply and demand and we consider they can be taken to be reasonable having regard to his expertise or he would not appear as frequently as he has done before the Tribunal.
64 But in assessing the costs which should be borne by the applicant any lack of detail or insufficiency in the information provided should be assessed in a manner which ensures that we err in favour of the applicant. It was within the power of the respondent or his legal advisers to ensure there was no such insufficiency.
65 In the circumstances we intend to allow the disbursements claimed but subject to a 20% reduction resulting in the amount allowed in respect of this item of $24,104.65.
66 We accordingly fix the costs payable by the applicant to the respondent in the total sum of $46,177.02 made up as follows:
Item No | Claimed | Allowed |
1 | $2,957.04 | $1,417.50 |
2 | $1,696.20 | $1,487.50 |
3 | $573.46 | $330.00 |
4 | $402.60 | $87.50 |
5 | $613.80 | $210.00 |
6 | $514.80 | $350.00 |
7 | $277.20 | $175.00 |
8 | $433.60 | $262.50 |
9 | 420.36 | $240.00 |
10 | $379.68 | $180.00 |
11 | $17,046.49 | $13,519.87 |
12 (a) | $745.80 | Nil |
12 (b) | $2,448.60 | $2,012.50 |
12 (c) | $1,396.68 | $1,080.00 |
13 | $813.60 | $720.00 |
14 | Nil | Nil |
15 | $30,130.81 | $24,104.65 |
TOTAL: FEES | $30,719.91 | $22,072.37 |
TOTAL: DISB | $30,130.81 | $24,104.65 |
TOTAL | $60,850.72 | $46,177.02 |
Order
We shall accordingly cause an order to issue in the following terms:
1. The costs payable by the applicant to the respondent are fixed in the sum of $46,177.02.
2. The applicant must on or before 19 January 2018 pay the respondent's costs in the sum of $46,177.02 to therespondent.
I certify that this and the preceding [66] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
MR C RAYMOND, SENIOR SESSIONAL MEMBER
0
3
5